Tuesday, September 26, 2017

City grants Nor'Wood ability to impose $325 million in special taxes

A rendering of the southwest downtown plan looking east into America the Beautiful Park.

In a historic move, Colorado Springs City Council approved taxing authority for three special districts that will fund development of the southwest downtown to the tune of $325 million — the costliest single move ever in the city's history — despite cautionary comments from some Council members and several citizens.

The developer, Nor'wood Development Group, is the largest in the region and plans multi-story office and residential development in the area immediately surrounding the Olympic Museum at Sierra Madre Street and Vermijo Avenue that's now under construction.

The boundaries for the districts are generally described as Interstate 25 on the west, Colorado Avenue on the north, Cascade Avenue on the east and Cimarron Street on the south.

The idea is to issue bonds and use revenue from taxes imposed by the special districts to repay the debt. Today, the area is home to vacant lots and unused buildings, a lack of infrastructure and very little, if any, commerce and residences.

Chief critics on Council are Bill Murray and Don Knight. Murray questioned approving the debt authority without more details and called it "a blank check," while Knight questioned the size of the authorization but said he was enthusiastic about the plan in general.

The vote was 6 to 1, Murray dissenting, with Councilors Andy Pico and Merv Bennett absent.

One citizen critic was Tim Hoiles, who's family used to own the daily newspaper, which operated under the Hoiles family with the Libertarian philosophy of limited government intrusion and participation in public business.

"I didn’t even hear about this until last week," he said. "Is this the largest ever asked for? Yes, it is. I have three words: accountable, which includes the mayor, Council and staff; piecemeal — roads, utilities, hospital pension account, and precedent. You keep setting it; it’s a bad thing.

"It’s not the Council’s job to give away taxing authority. I disagree with the developers.
I disagree with anyone who says, 'Give us government money to do our jobs.' It’s Nor'wood. This is not the only thing you’re negotiating with them on. They own Banning Lewis Ranch. Are those negotiations complete? You got a stormwater suit. There’s a development cited on Page 22 [of the lawsuit]: First and Main [a Nor'wood development accused of violating the city's drainage requirements]. You’ve got three things going on and you’re trying to piecemeal. Please stop piecemealing."

Banning Lewis Ranch is an 18,000-acre largely undeveloped tract on the city's east side for which Nor'wood is negotiating a new annexation agreement, first approved in 1988, to ease the burden on developer investment. The lawsuit Hoiles mentioned is the EPA lawsuit against the city alleging stormwater/water quality violations.

Another citizen, Don Hargrove, expressed concern that southwest downtown development would add to an ambience of downtown that focuses on bars, restaurants and banks to the exclusion of shops and other attractions; and another citizen asked what's driving demand for such a huge project. "It worries me we're spending much more money than we should."

But others applauded the project. Susan Edmondson, chief of the Downtown Partnership, says just because Colorado Springs hasn't seen "vertical" special districts, meaning district boundaries will apply to various floors of the high-rise buildings, doesn't mean they don't work.

"This layering helps make this project work," she said. "This is a structure that makes a lot of sense. This is what great cities do to make great cities happen."

Nor'wood will now proceed to an election of board members for the special districts on Nov. 7. The project is considered a 20-year undertaking that also was championed by city planning staff.

"The intent of the redevelopment area is to create a unique vibrant place for resident and visitors and stimulate development and redevelopment throughout the entire city," planning director Peter Wysocki said. "I think it’s important to paint the image and stress the importance of this project."

Council President Richard Skorman argued stridently in favor of the proposal.

"It’s the people who become the business owners or apartment owners who decide to join in, that’s when they’re voting," he says. "If they don’t want to be a part of that business district, they don’t have to be. I joined the downtown business district because it benefits my business.
It’s really growth paying for itself. We don’t want to hurt the flexibility of this because the opportunity for this is just so great."

He noted a project such as this one could lead to passenger rail, more greenway development and jobs. "Why can’t we get an Amazon to come to Colorado Springs? This is an opportunity, and it’s what every other city has done. We’re lagging behind."

City Economic Development Officer Bob Cope said the project will generate millions in tax revenue, add 5,000 jobs and add billions to the city's gross metropolitan product.

Council President Pro Tem Jill Gaebler noted the authorized debt will fund infrastructure, not another high-rise to be owned by the developer.